mises.org/daily/6451/Is-Austerity-Responsible-for-the-Crisis-in-Europe
Tag Archives: Money/Economy/Taxes
Great Discussion of Gold Manipulation
www.paulcraigroberts.org/2013/05/18/washington-signals-dollar-deep-concerns-paul-craig-roberts/
He greatly exaggerates the action government took against Bitcoin, but this analysis of gold manipulation is excellent.
US Treasury secretary says he has begun tapping federal retiree pension fund to avoid default
I should not be shocked by this, but the illusion of government efficacy is so pervasive that I am shocked, over and over and over.
Treasury Secretary Jacob Lew said late Monday he will begin tapping into two government employee retirement funds to buy more time before the U.S. Treasury is faced with the prospect of defaulting on the national debt.
In a letter to congressional leaders, Lew said that he would tap the civil service retirement and disability fund and a similar fund that covers retired postal workers. The law allows him to remove investments from these funds to clear room for more borrowing until Congress votes to raise the debt limit
(Read more)
Why the whole banking system is a scam – Godfrey Bloom
IRS targeted Tea Party
When tax agents started singling out non-profit groups for extra scrutiny in 2010, they looked at first only for key words such as ‘Tea Party,’ but later they focused on criticisms by groups of “how the country is being run,” according to investigative findings reviewed by Reuters on Sunday. news.yahoo.com/irs-kept-shifting-targets-tax-exempt-groups-scrutiny-041423528.html
Teens enter vocational school, come out with jobs, no debt
Germans Poorer than the People they’re Subsidizing
From Open Europe News summary:
A new OECD study has found that on average, German male pensioners receive a lower pension relative to their earnings (58%) compared to Greeks (110%), Spaniards (84%) and Italians (76%).
GDP Propaganda Exposed
Is your coutry’s GDP too low? No problem! Just lie. I can almost *feel* the economy getting healthier. Whelp, I’m off to sell my gold and buy government bods.
IRS claims it can read your e-mail without a warrant
The Internal Revenue Service doesn’t believe it needs a search warrant to read your e-mail.
Newly disclosed documents prepared by IRS lawyers say that Americans enjoy “generally no privacy” in their e-mail, Facebook chats, Twitter direct messages, and similar online communications — meaning that they can be perused without obtaining a search warrant signed by a judge.
That places the IRS at odds with a growing sentiment among many judges and legislators who believe that Americans’ e-mail messages should be protected from warrantless search and seizure. They say e-mail should be protected by the same Fourth Amendment privacy standards that require search warrants for hard drives in someone’s home, or a physical letter in a filing cabinet. (Read more)
U.S. to let spy agencies scour Americans’ finances
The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.
The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.
Financial institutions that operate in the United States are required by law to file reports of “suspicious customer activity,” such as large money transfers or unusually structured bank accounts, to Treasury’s Financial Crimes Enforcement Network (FinCEN). (Read more)
Gaga Over Galbraith
Stupid ideas, and discredited economists keep rising from the dead.
Based on his book sales, John Kenneth Galbraith was probably the most read economist of the 20th century. From the publication of his first bestselling book The Great Crash in 1954 through the 1980s, the American left-liberal intelligentsia and media breathlessly anticipated and wildly celebrated the publication of each new book. Nonetheless, most technical economists, regardless of their political orientation, did not take his work seriously. By the 1990s Galbraith’s work had been thoroughly discredited among professional economists. Indeed, in his 1994 book, Peddling Prosperity, leftist economist Paul Krugman held up Galbraith as the prototype of a left-wing “policy entrepreneur” who, like his supply-sider counterparts on the Right, sought an audience among policymakers and the educated public, outside the cozy circle of academic economists.
In his book, Krugman ridiculed The New Industrial State, Galbraith’s magnum opus. He pointed out its wildly erroneous predictions regarding the evolution of the US economy toward greater dominations by giant corporations that were insulated from market forces . . . .
But discredited economists, much like disgraced politicians, never remain out of favor for long, especially after they have passed from the earthly scene. So it is that Galbraith’s reputation has been undergoing something of a rehabilitation in the past decade. Especially among those mainstream academic economists who are vaguely cognizant of the rapidly accumulating failures of their discipline in explaining economic reality, Galbraith is increasingly perceived as a misunderstood thinker whose insights were ahead of their time and whose work was too hastily dismissed.
For example, Nobel laureate Amartya Sen was positively elegiac in his appraisal of Galbraith, exclaiming that he “doesn’t get enough praise.” In an interview, Sen opined that Galbraith’s work would indeed endure and that his book The Affluent Society exemplified Galbraith’s “great insight.” . . .
Robert Frank is another economist with impeccable mainstream credentials who has a predilection for behavioral economics and a soft spot for Galbraith. He has argued that Galbraith’s position that the market economy systematically misallocates resources between private and public sectors “was right for the wrong reasons.” If only Galbraith’s training had been grounded in modern game theory, Frank contends, he would have been better able to defend himself against his academic critics.[4]
Now there are probably various reasons for the burgeoning Galbraith lovefest among mainstream economists. But, I believe, the primary reason is the growing dissatisfaction within the economics profession with the transmogrification of economics into a hyper-mathematical, model-driven discipline that tells us exactly nothing about the real world, as the financial crisis has plainly revealed.
Compared to the arid and mechanistic “theorems” of modern economics, even Galbraith’s unsystematic and pedantic musings are a breath of fresh air, because at least they are expressed in English and make reference to real and meaningful phenomena. This is, of course, not an endorsement of Galbraith’s approach to economics or his various positions. Indeed far from it: rather it is an attempt to explain the unjustified accolades his work is beginning to receive from professional economists. . . .
Robbins did not think much of Galbraith’s mental acuity and dismissed him as a shill for New Deal policies, writing,
I knew Galbraith in the old days; he sat for some little time in my seminar. I must say I am not altogether surprised at what has happened; for I have always thought him a dull fellow, well intentioned enough, but a sort of pedant of New Deal economics — just the kind of man to upset the business community without himself bringing any startling administrative ability to offset the loss of that which he had antagonized.
. . . .
Meade was, therefore, in no sense a conservative or free-market economist and in fact could be classified as a Fabian socialist or social democrat in his policy leanings. Yet he viewed Galbraith in much the same light as Robbins. He wrote in a diary entry,
Later I dined with Galbraith and his wife at the Cosmos Club and then went on to their home in Georgetown to talk. He is the “relentless” type of radical, believes that Russia should be permitted to absorb Poland, the Balkans and the whole of Eastern Europe in order to spread the benefits of Communism, that the outlook for American politics is very black because even if the Roosevelt administration wins the next election the liberal New Dealers are now all a crowd of tired, cautious, conservative liberals etc. I think he may be a little embittered at the punishing experience at the OPA where there was a witch hunt against liberal College professors of which he was the main victim.
. . . .
In a review of books on inflation and the business cycle in the late 1970s, one of which included a book by Robert Heilbronner, Rothbard remarked,
Robert Heilbroner, like John Kenneth Galbraith, might be said to fall into the category of “popular economist”: that is, someone who knows virtually nothing about economics, yet manages to write a series of best sellers on the subject, read avidly and almost exclusively by noneconomists, who exclaim over the profundities therein.
Rothbard goes on to utilize Galbraith as a standard of economic ignorance, describing Heilbronner as “a lightweight, for he knows even less economics than Galbraith does and lacks the mordant wit (derived, if not cribbed, from Veblen) and the aristocratic life style of the famous opponent of affluence.”
“Tax Expenditures”: Not Taxing Is Allegedly Spending
Runaway government spending is among the most important economic problems of our time. It is absolutely urgent that it be brought under control and progressively reduced until it is sufficient to provide for no more than the essential government functions of defense and justice. Only then will the citizens have the greatest possible individual freedom to decide how their earnings are spent and the greatest possible motivation to increase their earnings and improve their standard of living.
As recognition of the importance of bringing government spending under control has grown, the enemies of individual freedom have seized upon a tactic which they hope will avoid the necessity of reducing government spending, and, will allow them to go on increasing it, under a fraudulently created appearance of reduction. The tactic is described as “tax expenditure.”
More precisely, a tax expenditure is a fictional, non-existent tax accompanied by an equivalent fictional, non-existent expenditure. Although the government does not actually collect the tax, the fact that it has the power to do so is used as the basis for pretending that it does collect the tax and that it uses the proceeds to make an expenditure that goes to those from whom it has chosen not to collect the tax. In this way, the taxes that are not collected are treated as though they were collected and then used as a subsidy paid to those from whom they were not collected. In effect, the government’s not taking is alleged to be giving. Its not taxing is alleged to be spending.
Examples of tax expenditures recently provided by The New York Times are the taxation of capital gains and dividends at lower rates than ordinary income; allowance for deductions from taxable income of the payment of interest on home mortgages, the payment of property taxes, state and local income taxes, charitable contributions; and the absence of taxation on employees for health insurance and pension benefits paid for by employers on their behalf. All in all, according to The Times, “Tax expenditures cost the federal government more than $1 trillion a year in lost revenue.”
When one recalls that in World War II, there was a 90-percent bracket in the federal income tax, and that the government has it in its power to impose such a tax rate on everyone but presently chooses not to do so, then it becomes clear that by the logic of the concept, the cost of tax expenditures to the federal government is not just $1 trillion, but many, many trillions. It is, in fact, everyone’s entire income and wealth.
The philosophical principle underlying the concept of tax expenditure is that we are all serfs or slaves in the power of our Lord and Master the Almighty Government. It owns us and all of our income and wealth. All that we earn and possess, we do so by virtue of its largess, by virtue of its giving to us what we may have believed was ours to begin with. (Read more)
Obama administration pushes banks to make home loans to people with weaker credit
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. (Read more)
Alameda County rewards boss: $400k…for life
California will be the first state to declare bankruptcy.
Alameda County supervisors have really taken to heart the adage that government should run like a business — rewarding County Administrator Susan Muranishi with the Wall Street-like wage of $423,664 a year.
For the rest of her life.
According to county pay records, in addition to her $301,000 base salary, Muranishi receives:
– $24,000, plus change, in “equity pay’’ to guarantee that she makes at least 10 percent more than anyone else in the county.
– About $54,000 a year in “longevity” pay for having stayed with the county for more than 30 years.
– An annual performance bonus of $24,000.
– And another $9,000 a year for serving on the county’s three-member Surplus Property Authority, an ad hoc committee of the Board of Supervisors that oversees the sale of excess land.
Like other county executives, Muranishi also gets an $8,292-a-year car allowance.
Muranishi has been with the county for 38 years, and she’s 63. When retirement day comes, she’ll be getting a lot more than a gold watch.
That’s because, according to the county auditor’s office, Muranishi’s annual pension will be equal to the dollar total of her entire yearly package — $413,000. She also has a separate executive private pension plan, for which the county chips in $46,500 a year.